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Where the Industry is Going

The Future of Health Incentive Programs: Highly Engaging Programs That You’ll Setup and Control Yourself

One thing everyone can agree on concerning healthcare? It’s a very turbulent industry. In recent years, especially, dynamic changes within healthcare have rendered the nation’s largest private-sector industry somewhat chaotic.

Deloitte’s 2017 global healthcare outlook puts it this way: “Rising demand and associated spending are being fueled by an aging population; the growing prevalence of chronic diseases and comorbidities; development of costly clinical innovations; increasing patient awareness, knowledge, and expectations; and continued economic uncertainty despite regional pockets of recovery are just a few of the key issues and trends impacting the global health care sector.”

Those are just “a few” of the issues facing healthcare in the near future! Turbulent times indeed.

And there’s one more change of course that healthcare organizations will have to navigate soon: fundamental changes in the management and operation of consumer health incentive programs (CHIPs).


A Look Back…

Before we explore the changes coming in health incentive programs, let’s take a quick look back. After all, insights into the future can often be revealed through exploration of the past.

If you’re old enough, you probably remember Green Stamps. For many decades, if you went to a store and purchased groceries, you were likely to leave that store with your groceries and a stash of S&H Green Stamps.

You’d save up your stamps — dutifully pasting them in the little booklets provided — and when you had enough, you’d redeem them for rewards. The rewards you could choose from were not just trivial tokens. Green Stamp collectors were offered a huge selection of rewards; essentially the same as shopping at any well-stocked department store.

Running from the late 1800’s to the 1970’s, the Green Stamp program is widely recognized as the first consumer incentive program, and it was wildly successful. At the program’s peak in the 1960’s, S&H could boast of issuing three times the volumes of stamps issued by the U.S. Postal Service. Redemption centers could be found virtually everywhere. And S&H’s reward catalog was the largest publication in the nation.

(By the way, if you happen to have some old Green Stamps languishing in the back of a drawer somewhere, don’t toss them in the trash. You can still redeem them for goodies if you have enough of them.)


Continuously Upping the Value Proposition

Green Stamps pioneered the concept of offering the consumer increased rewards for increased participation. The more you shopped at a store offering Green Stamps, the more stamps you were rewarded. The more stamps you earned, the greater your realized value when you redeemed your stamps.

But the Green Stamps program also trained consumers to expect more for their patronage and their loyalty. So much so that bank loyalty programs had to contract with other merchants to help fund their reward programs in keeping pace with consumer expectations. Continuously increasing the value propositions offered to the consumer became necessary in maintaining competitiveness with other rewards/loyalty programs.

In essence, the rewards/loyalty programs deployed in most industries offered increasing value propositions to consumers with the goal of incentivizing a particular outcome.

That’s the way it has been in most industries. But not healthcare.


CHIPS Are Changing

Consumer healthcare incentive programs, historically, have been rather one dimensional. They’ve been based more on participation, and less on achieving a particular outcome. Healthcare programs simply haven’t been as dynamic and motivating as the programs deployed by most other industries over the last half century.

But that is changing. Healthcare programs are following the path pioneered by grocery stores, banks, and other consumer-oriented industries.

As this inevitable evolution occurs, healthcare programs are going to focus more upon achieving behavioral outcomes. The complexity of behaviors and the interactions between behaviors is going to become increasingly important. The ability to encourage and manage real-time interactions with healthcare consumers is going to provide the foundation for that evolution.

And just as other industries — banking, for example — have drawn multiple sponsors into their plans by partnering with other businesses, healthcare will do the same. Healthcare incentive programs will partner with employers, pharmacies, and others in emulating the multi-sponsor model that has proven so successful in other industries.


The Current Management Model Won’t Work

As healthcare incentive programs move toward a more behavior-based, multi-sponsor model, healthcare organizations will have to abandon their current CHIP management tools. That’s because most CHIP management tools simply don’t offer the dynamic management capabilities that will be necessary for progressive CHIP programs.

The ability to quickly configure, communicate, track, and then evaluate results will become increasingly important. For most organizations, the process of managing a CHIP will have to change substantially from current management methodologies.

Today, for example, it’s common for an organization to setup a CHIP at the beginning of the year, target a given population to perform a task or tasks (annual physical, health risk assessment, etc.) — and then just coast through the year hands-off, simply hoping that the goals are achieved.

But as healthcare programs follow the examples of other industries, the process will change. Reward strategies and programs will more closely follow other consumer retail models. CHIPs programs will become as compelling, as responsive, as real-time, and as complex as other rewards programs.

This change will be a natural progression that’s incentivized by market forces. Organizations wishing to remain competitive will have to modernize their CHIPs programs accordingly.

Value Based Performance

Healthcare is changing to a performance based performance model, so why shouldn’t your vendors? In the next couple of years aligning your vendors toward a value based performance model will be the key to aligning vendors and your goals. With the right vendor and the right tracking tools this will be a win-win in vendor alignment.

This means the right vendor should have the tools to report on what is going on inside the program as well. Whether the goal is to close gaps in care, increase engagement with vendor tools, or other business objectives. Value based performance should extend beyond the provider office to vendor relationships moving forward.

Access Points

Not only do you have to now worry about contacting members not only at the right time and by their preferred method, but you also have to worry about having the correct contact address. The future of engagement programs will allow members to not only interact with the plan online and by mobile phone, but by access points that are available where they shop and work.

As technology evolves accessing the member should evolve as well. Member outreach campaigns performed by member service teams can increase engagement up to 40%, and with physical access points outside of the provider office engagement can increase up to 60%.

A Competitive Necessity

Healthcare, quite bluntly, has lagged other industries in truly understanding consumer behavior. Until recently, the nature of the industry has permitted and tolerated that lack of understanding — at least to a degree.

But healthcare is now becoming as fiercely competitive as any other industry. And healthcare consumers will become ever more demanding as market forces require them to spend a greater proportion of their out-of-pocket dollars on healthcare costs. Consumer loyalty — virtually ignored by healthcare in the past — will become crucially important to healthcare organizations.

Grocery stores that didn’t give out Green Stamps 50 years ago were at a serious competitive disadvantage. Similarly, healthcare organizations that can’t dynamically manage CHIPs programs to encourage behavior modification and enhance consumer loyalty will also be competitively disadvantaged.

If your organization can’t offer a dynamically managed and engaging CHIPs program, one day soon you’ll be the equivalent of that rare store that didn’t offer Green Stamps. And why would anybody want to shop there?

S&H Green Stamps pioneered consumer rewards programs. In much the same way, ChipRewards has revolutionized the management of CHIPs programs for healthcare.



Josh Smithey

VP of Products and Sales Enablement - ChipRewards